YEREVAN, June 23. /ARKA/. The Central Bank of Armenia said on Tuesday it has decided to keep the refinancing rate at 10.5%.

In May 2015, a 0.5 percent deflation was recorded in Armenia against a 0.8 percent deflation in May 2014. As a result, a12-month inflation stood at 5.1% in late May.

In the foreign sector, the global economy continued its slow growth. Deflation environment remained at the world food market as higher-than-expected oil prices formed at the key raw materials market due to a high season demand for oil products, contraction in the United States' reserves and the expected fall in supply.

Nevertheless, the central bank's board expects no inflation impacts from the outside.

The board placed it on record that the macroeconomic stability achieved in the beginning of this year continues contributing to restoration of economic activity.

Economic activity rose 2.5% in Jan-May 2015mainly due to things in agriculture and industry.
The regulator says agriculture is believed to continue growing and this will drive prices for agricultural products down.

The mentioned deflation impact will offset the inflation influence expected in August as a result of the increase in electricity prices and the central bank's decision to leave the key rate unchanged.
A12-month inflation will be fluctuating near the ceiling of the projected frames, and in 2016 will stabilize around the projected range.

In the future, along with inside and outside economic developments, the central bank will correct its monetary policy directions, ensuring the projected inflation rate in a medium run.
The last time the regulator revised the key rate was on 10 February 2015, when it raised the rate from 9.5% to 10.5%. --0--